How HR Leaders Can Decrease Hospital Costs [Q&A]

Today, human resource leaders must be proactive in decreasing costs within their healthcare organizations. I sat down with Meadville Medical Center VP of HR, Greg Maras and DeKalb Medical's Executive Director of HR, Cathy Hardin to pick their brains on how they have done just that.

What techniques have you used or are currently using to engage your C-suite and leadership team?

Greg Maras: Trying to identify what needs the organization has and how HR can play a role in assisting or solving those problems. Sometimes I go to them and say, “This is what we’ve got going on," or, "This is an issue that we have” and have them consider it. With this group of people, it’s usually the later rather than the prior. It’s usually me coming up with a way to do things more efficiently. Sometimes, it’s getting information from peers of mine or groups I’m in—learning best practices and then going back to them.

Does your Human Resource Department drive discussion with the c-suite or does the c-suite drive discussions with HR?

GM: Typically, we (HR) drive the conversation. It could be because we’re a smaller organization.

CH: Human Resources has a true partner relationship with our c-suite. We drive from both sides. If HR becomes aware of a situation or trend that needs to be addressed, we will research and bring as much data to support a plan of action and ask for support. Likewise, if the c-suite thinks there is an issue, they will ask HR to provide insights regarding the market and if we, as an organization, should be doing anything differently.

What type of data and reports do you review each week which provide insight into areas to decrease costs? What about monthly?

GM: We will typically report to them on a weekly basis in an open position report. This shows what positions are available and what positions we have filled. It doesn’t have a cost to it, but it does show what we’ve budgeted versus what we’ve actually hired for.

CH: We review turnover reports, agency usage and overtime reports on both a biweekly (by pay period) and monthly basis.

What has been your experience with decreasing costs as it relates to using premium labor? I.e. overtime, shift bonuses, travelers, agency staff.

GM: It’s all about getting the critical positions filled as quickly as possible. The two main areas with premium labor are ICU or ER. Where we’ve had more than our fair share of turnover, the need to get those positions recruited and filled as quickly as possible is crucial because even after we fill these positions, there’s still a learning period that can last weeks and weeks. The quicker we can get those filled, the better we’ll be in the long run.

CH: It is very difficult to decrease premium labor costs with staffing shortages remaining high despite activity around driving those things referenced down. We have not yet been able to see any significant changes.

What changes have you made when tracking “people costs” such as salaries, cost per FTE, overall salaries by department, etc.?

GM: We have an FTE report that shows where we are to budget. It doesn’t show cost-dollar but does show what is budgeted.

CH: We have made some salary adjustments to nursing pay in the past 18 months in an effort to slow and reduce turnover. We have also looked at ways to engage staff with leaders through rounding, quarterly employee forums and new-to-the-organization (less than 90 days) breakfast sessions.

About the Author

Joe is a Senior Vice President at Hueman. What’s Most Important? To provide my two wonderful daughters with both positive and meaningful life lessons, while leading a happy and healthy lifestyle. In One Word, I Am: Passionate. What Makes Me Tick? Making a difference in the lives of my family and friends makes me jump out of bed every day. I love being active and living a healthy lifestyle. My career? 16 years experience within recruiting and within healthcare; 7+ years experience within accounting and finance (5 years with the largest worldwide public accounting firm).